Question

The present value of a machine is rupees 8100 which was purchased two years back. The rate of depreciation is 10%. Find out the original value and two years depreciation assuming that depreciation is charged on diminishing balance method.

Answer 1

unless, machine is used the present value of a machine is rupees 8100 which was purchased two years back.

machinery account.

dt. particulars ₹. dt. particulars. ₹

1/1 to bank. 8100. 31/12 by deprec. 810

(cost of machi). by balance c/d7290

8100. 8100

1/1 to balance 7290. 31/12 by deprec 729

b/d.

by balance c/d 6561

7290 7290